A high-rent state

In Rhode Island, high housing costs continue to put workers, and those who would employ them, at a disadvantage. HousingWorks RI, a nonprofit group that researches state housing issues, recently released...

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Posted Oct. 8, 2013 @ 12:01 am

In Rhode Island, high housing costs continue to put workers, and those who would employ them, at a disadvantage. HousingWorks RI, a nonprofit group that researches state housing issues, recently released its 2013 Fact Book, illustrating the challenge afresh.

Compared with other New England states, Rhode Island has a high proportion of households (40 percent) that rent rather than own. Yet rental costs in many area communities have soared, sometimes dramatically, over the past decade. According to HousingWorks, the average rent for a two-bedroom apartment in Warwick reached $1,315 in 2012. In Cranston, the cost was $1,157, and in Providence (excluding the pricy East Side), it was $1,089.

Affordable housing is typically defined as costing no more than 30 percent of household income. Close to half of Rhode Island’s 163,337 rental households struggle somewhere short of that threshold. And more than a quarter are defined as “severely cost-burdened,” meaning they spend more than half their income on housing.

The causes underlying the rental explosion are complex. But they include a tight supply of housing units, many quite old. These units are costly to repair and maintain, and often carry high taxes. New construction, on the other hand, is saddled with high land and permitting costs, putting newer units out of reach for many Rhode Islanders.

HousingWorks and other advocates support greater investments by the state, both in construction and, for the poorest residents, rent subsidies. On the construction side, Rhode Islanders have generously supported recent bond issues. A $50 million initiative approved in 2006 helped create 1,255 affordable units. Last year, another $25 million was approved, and is expected to add about 600 more.

With federal aid dwindling, and the state’s economy still in the doldrums, doing much more will be difficult. Nevertheless, state lawmakers should consider allocating at least some money to rent subsidies, as they did in the past through the Neighborhood Opportunities Program.

For the lowest-income households, such supports can make a huge difference, freeing scarce dollars for other necessities. And employers, especially in the service sector, can be more confident of finding the workers they need if they know housing is available.

As HousingWorks notes, such taxpayer investments can help to revive neighborhoods, and have been shown to pay their way by generating new economic activity. Certainly, Rhode Island faces substantial economic challenges in the years ahead, and must use its resources carefully. But it would do well to invest at least some money in affordable housing.